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en-usTechdirt. Stories filed under "investments"https://ii.techdirt.com/s/t/i/td-88x31.gifhttps://www.techdirt.com/Thu, 6 Nov 2014 12:40:47 PSTKeith Alexander's Investments While At The NSA Included A Data Storage Provider For AT&TTim Cushinghttps://www.techdirt.com/articles/20141105/09271829054/keith-alexanders-investments-while-nsa-included-data-storage-provider-att.shtml
https://www.techdirt.com/articles/20141105/09271829054/keith-alexanders-investments-while-nsa-included-data-storage-provider-att.shtml
Keith Alexander's financial records -- sprung by Jason Leopold's lawsuit against the NSA and explored in depth by Shane Harris -- continue to point towards more questionable behavior on the part of the former NSA director.

In 2008, Alexander bought and sold tens of thousands of dollars in stock in a company called Synchronoss Technologies Inc., based in Bridgewater Township, N.J., according to the retired Army general’s financial-disclosure forms. You’ve probably never heard of Synchronoss, but, like the NSA, it probably knows who you are. If you’ve ever activated a new iPhone or synced your personal information across multiple devices—such as your phone, and your home and office computer—there’s a chance that Synchronoss’s technology helped make it happen. The company’s customers are some of the largest telecommunications service providers in the world—including AT&T, Verizon, Comcast, and Time Warner Cable—along with their more than 3 billion mobile subscribers.

More to the point, Synchronoss provided the tech that "locked" iPhones to AT&T's network back when the iPhone was an AT&T exclusive. It was during this period of time that Alexander was investing in the company, basically putting a single step between him and the service provider his agency enjoyed a very comfortable relationship with.

Under secret court orders, the agency was then hoovering up the phone records of AT&T’s subscribers and pouring them into a database of who called whom in the United States, stretching back several years. After the 9/11 terrorist attacks, the NSA also had secretly installed communications surveillance equipment in some of AT&T’s offices, under orders from President George W. Bush.

The NSA has only provided records dating back to 2008, at which point Alexander already had between $15,000 and $50,000 invested in Synchronoss. 2008 was a turning point for Synchronoss, which saw its surefire moneymaker heading down the tubes as iPhone buyers began jailbreaking their devices and freeing them from AT&T's network. Harris notes that Alexander picked up more Synchronoss stock when its price slid following its announcement of lowered future expectations and had cashed out completely by 2009, making less than $200 from stock sales during this time period.

But what's not shown is Alexander's pre-2008 investments, which would include the lucrative debut of the iPhone (2007). Those are likely gone forever, thanks to limitations of what must be disclosed by these mandatory documents. (Agencies only need to provide the last 5 years of documentation.) What the documents do show is that the NSA had no problem with Alexander being one step removed from one of the NSA's most willing "providers," something that should have been examined more closely by the agency's internal ethics watchdogs.

Now that Alexander is in the private sector, he has to work harder to trip "conflict of interest" sensors. And yet, trip them he has… multiple times. Whether this is an indication that Alexander is no more prepared for the freedom of the "real word" than an ex-con who's just spent multiple decades behind bars or an indication that the former director's moral compass has always been just a bit off remains to be seen. But everything observed so far seems to point to the continuation of the "above the law" attitude the intelligence community projected for so many years. More than a year into this Snowden-activated era of forced transparency, officials are still showing how easily they burn when exposed to sunlight.

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]]>watching-his-money-while-watching-the-nationhttps://www.techdirt.com/comment_rss.php?sid=20141105/09271829054Thu, 16 Oct 2014 00:48:24 PDTSwedish Company Uses Corporate Sovereignty Clause To Demand 4.7 Billion Euros From German PublicGlyn Moodyhttps://www.techdirt.com/articles/20141015/08244228837/swedish-company-uses-corporate-sovereignty-clause-to-demand-47-billion-euros-german-public.shtml
https://www.techdirt.com/articles/20141015/08244228837/swedish-company-uses-corporate-sovereignty-clause-to-demand-47-billion-euros-german-public.shtml
A couple of months ago we mentioned the long-running legal battle involving the Swedish energy company, Vattenfall, which is suing Germany using corporate sovereignty provisions in the Energy Charter Treaty after the German state decided to phase out nuclear power stations. The rumored figure we mentioned then was the already-generous €3.7 billion; but it has just been revealed that Vattenfall is actually demanding even more -- €4.7 billion, to be precise. We know this is the real figure, because it was mentioned by Germany's Minister of the Economy, Sigmar Gabriel (original in German.)

This fact may help to explain persistentreports that Germany will not agree to the inclusion of an investor-state dispute settlement (ISDS) chapter in either TAFTA/TTIP or CETA (the Canada-EU trade agreement). Germany is already experiencing first-hand the dangers of such corporate sovereignty provisions, and clearly wants to avoid suffering any more on this front.

The latest information, reported by the German news magazine Der Spiegel, points out that two other energy companies, RWE and E.on, are unable to sue in the same way as Vattenfall, because they are German companies, and the ISDS option is only available to foreign investors. This underlines the fact that, far from creating a level playing-field, corporate sovereignty is biased against local companies. For this reason, RWE and E.on are also trying to sue in Germany's national courts in order to obtain compensation, as Vattenfall is doing with the ISDS tribunals; whether they can depends on a ruling from Germany's constitutional court, due early next year. Interestingly, Vattenfall is also suing the German government through these courts -- which shows how ISDS gives foreign investors extra ways of claiming compensation.

Finally, the Der Spiegel article points out that the original estimate of the potential costs to the German government (and thus to the German taxpayer, who has to pick up the bill) from the action in the national courts, which were put at between €15 billion to €20 billion, are probably too high. That's because the price offered for supplying electricity has now dropped, bringing down potential profits too. That demonstrates the danger of granting corporate sovereignty tribunals unchecked power to make awards in favor of companies based purely on the latter's probably exaggerated claims about uncertain "losses" far into the future.

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]]>are-you-sure-that's-enough?https://www.techdirt.com/comment_rss.php?sid=20141015/08244228837Tue, 16 Jul 2013 02:43:23 PDTKim Dotcom Planning To Invest In Privacy StartupsMike Masnickhttps://www.techdirt.com/articles/20130716/01581723815/kim-dotcom-planning-to-invest-privacy-startups.shtml
https://www.techdirt.com/articles/20130716/01581723815/kim-dotcom-planning-to-invest-privacy-startups.shtmlrenewed interest among many entrepreneurs to build much more security and privacy conscious apps. In that post, we noted that Kim Dotcom's Mega is working on encrypted chat and email, but it appears he wants to go much further. He's now announced that he's starting a venture capital fund for privacy-focused startups as well. Of course, it will be interesting to see what the actual details are and what comes out of it, but it's yet another sign that the revelations that have come out about widespread government surveillance many lead to a much needed refocusing on how to build much more secure and private systems in this digital era. It seems odd to think that, indirectly, the US government's highly questionable legal assault on Dotcom may eventually lead to the funding of a variety of applications and services that block out the US government's prying eyes.

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]]>actions-have-consequenceshttps://www.techdirt.com/comment_rss.php?sid=20130716/01581723815Fri, 24 Aug 2012 15:19:02 PDTAnd... The Bureaucrats Begin Spreading FUD About CrowdfundingMike Masnickhttps://www.techdirt.com/articles/20120823/01035920130/bureaucrats-begin-spreading-fud-about-crowdfunding.shtml
https://www.techdirt.com/articles/20120823/01035920130/bureaucrats-begin-spreading-fud-about-crowdfunding.shtml
There's been a fair amount of talk about this effort, and a bunch of companies chomping at the bit to get into the market once crowdfunding for equity is officially in place. The main holdup? The SEC. As part of the law, the SEC is supposed to put forth rules for how such crowdfunding can work. But the SEC made it quite clear before the law passed that it didn't like this idea -- not one bit. So I've been quite curious to see what rules it would eventually put out... and so far all it's done is keep stalling. The rules were supposed to come out yesterday (which was already postponed from the original date), but instead, the SEC pushed things back another week.

While everyone waits for the SEC rules, various state securities regulators, in the form of the North American Securities Administrators Association (NASAA), are ramping up the FUD about such equity crowfunding. They released a report on the top investment scams... and crowdfunding in general is near the top of the list. They seem especially worried that the space is quickly going to be overcome by fraud:

"The number of entities out there already pitching themselves as crowdfunding entities online has risen in a significant fashion," said Matt Kitzi, NASAA Enforcement Section Chair and Missouri Securities Commissioner. "Just look at web domain names: it has gone from a couple hundred to well over 1,600 in the past year. They are staking up a position to enter crowdfunding market. There will be a lot more to come on this."

In early in August, the Massachusetts Securities Division charged a Lowell, Massachusetts man for a crowdfunding scam, bilking 20 investors who thought they were investing money in a gaming site of $153,396.

Secretary of the Commonwealth William Galvin, who brought the case, wrote to the SEC urging regulators not to let the JOBS Act changes become a tool for financial fraud and abuse. "Longstanding problems in the markets for small and speculative stocks show the pitfalls of relying on the wisdom of crowds."

Here's the thing: there are always scammers out there. And that's going to be a big part of the challenge for any of the platforms that are jumping into the equity crowdfunding space to deal with. They're going to have to distinguish themselves by how they enable trust between buyers and sellers and how they prevent fraud. But, some fraud is going to happen -- just as some fraud is always going to happen in just about any market. That doesn't mean we don't let the market itself develop.

In the end, I'm guessing that the SEC rules will be fairly strict, and may limit this kind of market. Also, contrary to some expectations, I doubt that many will see this as a true replacement for angel or VC financing. It seems like the sort of thing that will likely be more useful for small businesses (such as local businesses) rather than traditional high growth enterprises which are the kinds of "startups" that usually attract angel and venture money. Surely, some people will set up scams and get tricked. But there have been scams in the startup world for ages, and there are likely already some scams that have made it through existing crowdfunding platforms. But that's the nature of risk. Sometimes you lose.

While most people focus on how this will compete with angels and VCs, I'd think that it's much more a form of competition for the crowdlending platforms, since those are more about investment as well, just with debt financing, rather than equity financing. And while there certainly have been cases of fraud that came about because of those platforms, for the most part it hasn't sunk the top players in that space, because they've been able to try to minimize the likelihood of fraud while educating the market on investing wisely. There's nothing to suggest that the top players who emerge in the equity crowdfunding realm won't be able to do the same.

A large majority of the angel investors and venture capitalists who took part in a Booz & Company study say they will not put their money in digital content intermediaries (DCIs) if governments pass tough new rules allowing websites to be sued or fined for pirated digital content posted by users.

More than 70% of angel investors reported they would be deterred from investing if anti-piracy regulations against “user uploaded” websites were increased.

In fact, the survey found that investors actually would prefer to invest in a weaker economy than a stronger economy with SOPA/PROTECT IP in place. But if the definitions were actually narrowed to not impact so many legitimate startups, they'd invest again:

More than 80 percent of the angel investors would prefer to invest in a risky, weak economy (with the current internet regulations) vs. a strong economy (but with the new, more stringent proposed regulations on copyright infringement).

If the legal framework for digital content was clarified, and penalties on copyright infringement were limited for content providers acting in good faith, the pool of angels interested in investing would increase by nearly 115 percent.

Hollywood can continue to pretend that only its jobs are the ones that matter, but repeated studies have shown that job growth comes from new startups, and VCs and angels are what make new startups possible. Chilling investment is no way to help create jobs.

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]]>indeedhttps://www.techdirt.com/comment_rss.php?sid=20111116/11583416793Tue, 16 Nov 2010 07:21:55 PSTLawsuit Trolling: Investors Looking For Lawsuits To 'Invest' InMike Masnickhttps://www.techdirt.com/articles/20101114/22400911865/lawsuit-trolling-investors-looking-for-lawsuits-to-invest-in.shtml
https://www.techdirt.com/articles/20101114/22400911865/lawsuit-trolling-investors-looking-for-lawsuits-to-invest-in.shtmlhelp fund various lawsuits, in return for a cut of any eventual winnings. We've already seen how this is popular in patent trolling, but it looks like it's spreading to all sorts of civil lawsuits. Now, the core concept behind this activity is reasonable: lawsuits are expensive. And if you have a legitimate case, and it's too expensive to take on the effort, getting an investor can help you bring the case and bring a party to justice. But, like so many things that Wall Street gets involved in, what can be used for good, can also be massively abused for profits. Apparently, investors are behind some really wacky lawsuits that never should have been filed, and they often push for quick settlements in order to cash out at lower costs. Of course, it's not clear how widespread this practice is in total, since lawyers often don't reveal that there are investors behind a case.

Not surprisingly, the article notes that "lawsuit lending is a child of the subprime revolution," and often the lenders charge ridiculous interest rates, rather than being willing to just take a direct cut of any winnings. And, of course, these days, with the mortgage space being a weak investment, banks have to find somewhere new to put their money, and apparently lawsuits are attractive to some. The whole thing seems so open to abuse and excess that it seems likely that we're going to be hearing a lot more stories of lawsuit lending... and the resulting problems it causes.

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]]>this-will-not-end-wellhttps://www.techdirt.com/comment_rss.php?sid=20101114/22400911865Mon, 20 Oct 2008 23:48:14 PDTCongress Critters Invest In Big Companies; News At ElevenMike Masnickhttps://www.techdirt.com/articles/20081020/1905292600.shtml
https://www.techdirt.com/articles/20081020/1905292600.shtmlwhere our elected officials invest their own money, noting that an awful lot of it has gone into tech companies. For example, the second, third and fourth most invested in company among Congressional members are Cisco, Microsoft, and Intel, following on GE, which had the largest number of lawmaker investors (88). Of course, the number of investors doesn't necessarily say how much is invested, as Apple leads on that list, with Congressional members having put somewhere between $6.4 million and $31 million into Apple. Elected officials only need to give a range for their investments, hence the large spread. Of course, all of the info in the article isn't really all that enlightening, as the companies that these folks are invested in are basically the same as you would find on a list of the biggest companies in the US. So, basically, our Congress critters invest in big companies, many of which are in the tech industry. That's not particularly surprising.

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]]>not-much-to-gleanhttps://www.techdirt.com/comment_rss.php?sid=20081020/1905292600Fri, 30 Nov 2007 00:20:50 PSTSprint Turns Down Offer For Money, Help From SK TelecomMike Masnickhttps://www.techdirt.com/articles/20071129/234855.shtml
https://www.techdirt.com/articles/20071129/234855.shtmltear down some of its walled garden, then it announced plans to use LTE as its next generation wireless technology... and now the news comes out that Sprint has turned down an offer of a $5 billion offer from SK Telecom and Providence Equity Partners. There were some strings attached, including bringing back Tim Donahue to run Sprint. Donahue was the head of Nextel when Sprint and Nextel merged, but left soon after the merger was done. Personality-wise, people have often noted how Donahue was different than the folks at Sprint, so perhaps it's no surprise that Sprint isn't interested, even as the company is desperately seeking a CEO following the ouster of Gary Forsee.

What's more interesting than the CEO job or the money, however, is the question of what SK Telecom is playing at here. The company has invested heavily in its US MVNO joint venture Helio, which was announced nearly three years ago to great fanfare, but hasn't lived up to the hype (though, it has managed to survive where many MVNOs have collapsed). SK Telecom, like Japan's NTT DoCoMo before it, keeps looking for investment opportunities outside their home countries, but never seem to be able to repeat the successes they've had back home. DoCoMo, you may recall, had a deal with AT&T Wireless that turned into something of a disaster for everyone, so having SK Telecom assisting Sprint is hardly a slam dunk, despite its success back in Korea. SK Telecom seemed to pitch part of the benefit of working with Sprint being its experience with WiMax in South Korea, but so far, that experience is anything but encouraging. It's also worth wondering if such an investment would eventually lead to Sprint taking over Helio to consolidate SK Telecom's focus (alternatively, some might point out that since Helio uses Sprint's network, SK Telecom's investment offer could even be seen as a way to protect Helio's network).

What is clear is that Sprint needs some leadership and some direction, and it needs it quickly. With Verizon Wireless' LTE announcement, the race for next generation wireless technologies got a lot more interesting. While Sprint may have had a pretty big head start, the more it staggers around trying to find a CEO and a plan, the more it cedes to the other players who at least have the appearance of having a comprehensive strategy in place (the reality may not match the PR spin, of course). The SK Telecom deal may have provided both a leader and some direction, but clearly the company's current board didn't appear thrilled with either. Don't expect this to end here, though. There may be additional attempts by SKT, and it may cause others to wake up and pay attention as well. Sprint may end up with a leader and a strategy thrust upon it, whether it wants it or not.